What is Form 1040?
Form 1040 is that the standard federal tax form people use to report their income to the IRS, claim tax deductions and credits, and calculate the quantity of their tax refund or tax bill for the year. The formal name of the shape 1040 is “U.S. Individual Tax Return.” There wont to be three varieties, the 1040EZ, the 1040A, and therefore 1040, that covered simple to complex tax situations. Now there’s just Form 1040 and 1040-SR.
How Form 1040 works
Here’s what the form does:
Asks who you are:
The top of Form 1040 gathers basic information about who you’re, what tax filing status you’re getting to use, and the way many tax dependents you’ve got.
Calculates taxable income:
Next, Form 1040 gets busy tallying all of your income for the year and tallying all the deductions you’d wish to claim. The objective is to calculate your taxable income, which is the amount of your income that’s subject to income tax. You (or your tax preparer or tax software) consult the federal tax brackets to try to that math.
Calculates your tax liability:
Near rock bottom of Form 1040, you’ll write down what proportion tax you’re liable for. At that point, you get to subtract any tax credits that you might qualify for, as well as any taxes you’ve already paid via withholding taxes on your paychecks during the year.
Determines whether you’ve already paid some or all of your tax bill:
New IRS form 1040 also helps you calculate whether those tax credits and withholding taxes cover the bill. If they don’t, you’ll get to pay the remainder once you file your Form 1040. If you’ve paid too much, you’ll get a tax refund. (Form 1040 even features a spot for you to inform the IRS where to send your money.)
How do I get Form 1040?
If you’re filing your return using tax software, you answer questions and supply information that’s translated into entries on your Form 1040. You should be ready to electronically file your Form 1040 or 1040-SR with the IRS and print or download a replica for your records.
Which Form 1040 schedules should I use?
Everybody uses the regular IRS tax forms 1040 but there are also three schedules that you may or may not have to tack onto it, depending on your tax situation and whether you want to claim certain deductions and credits. Some people may not have to file any of these schedules.
Schedule 1: Additional income and adjustments to income
- Alimony income or payments
- Business income (you probably also need to file a Schedule C)
- Rental income (you may also need to file a Schedule E)
- Farm income
- Unemployment income
- Educator expenses
- Deductible moving expenses
- The health savings account deduction
- Deductible health insurance expenses
- Student loan interest
- Deductible retirement contributions
Schedule 2: Additional taxes
File this if you owe any of these:
- Alternative minimum tax
- Excess advance premium tax credit repayment
- Self-employment tax
- Additional taxes on IRAs, retirement plans, or other tax-favored accounts
- Household employment taxes
- Repayment of the first-time homebuyer credit
- Additional Medicare tax
- Net investment income tax
Schedule 3: Additional credits and payments
File this if you would like to say any of these:
- Foreign tax credit
- Credit for child and dependent care expenses
- Education credits
- Retirement savings contributions credit (the Saver’s Credit)
- Residential energy credit
- General business credit
What do I want to fill out Form 1040
You’ll need tons of data to try to do your taxes, but here are a couple of basics that the majority of people need to collect to urge started:
- Social Security Numbers for you, your spouse and any dependents
- Dates of birth for you, your spouse and any dependents
- Statements of wages earned (for example, your W-2 and 1099s)
- Statements of interest or dividends from banks, brokerages
- Proof of any tax credits or tax deductions
- A copy of your past tax return
- Your bank account number and routing number (for direct deposit of any refund)